$22 billion extra for fuel: India among countries which paid the most in Strait of Hormuz price shock, reveals study

An analysis by the Centre for Research on Energy and Clean Air (CREA) revealed that fossil fuel importers paid a gross extra cost of $330 billion for seaborne crude oil, oil products and LNG in the six months following the US-Israel strikes against Iran in February 2026. This was more than pre-war futures markets had expected to pay over the same period.

The report published on August 26 emphasised the "largest sustained oil price shock" the US–Iran war has caused since the 1990 Gulf War.

"During the conflict’s first six months, Asian LNG prices averaged 75% above pre-war expectations, European LNG prices 60% above, diesel 59% above and crude oil 35% above," the analysis by CREA revealed.

The movement in the Strait of Hormuz, a key economic trade route off the Iranian coast, remains restricted as the war between Iran and the US continues.

The study compared actual fossil fuel prices over the past six months with monthly expected prices in the 12 days before the US and Israel first struck Iran.

How much did India and other countries pay extra?

According to the CREA report, the highest gross extra costs were incurred by the EU (USD 78 billion), followed by China (USD 35 billion) and India (USD 22 billion).

This means that India suffered a gross additional cost of USD 22 billion in the six months following the strikes on Iran, compared to what pre-war futures curves had expected.

India, the largest LPG importer, was the second-highest among the top 20 countries after China, which bore the brunt of the Hormuz price shock. India's net additional cost across all fuels stood at USD 14.4 billion, compared with a gross additional cost of USD 22 billion.

The net additional cost is the amount remaining after accounting for additional export earnings that partly offset the higher cost of fuel imports.

This net extra cost of USD 14.4 billion is equivalent to 0.38% of India's GDP, representing the loss of approximately 1.4 days of national income.

The top 25 countries that paid the most, March to August 2026

India's LPG, crude oil imports

China paid USD 31.3 billion net for crude oil between March and August 2026, and India paid USD 20.5 billion, together 40% of the USD 131.2 billion crude total.

According to the report, India’s imported LPG bill over the six months came to about USD 4.7 billion, of which roughly a fifth was the extra cost caused by the price shock.

That extra cost was paid on volumes that collapsed in March to half the average volumes of the previous two years (2024 and 2025) and had recovered to 86% of that level by June, the report added.

Across the full six months, India’s extra LPG import cost is estimated at USD 1.1 billion.

Among importers, the typical low- or middle-income country paid about twice as much relative to the GDP as the typical high-income country, the report revealed.

'India’s LPG imports fell 49% in March'

The CREA report revealed that India’s LPG imports fell 49 percent in March, the first full month of the US-Iran war, compared with the average of the previous two years.

The US share of India’s LPG imports rose from 8% in February to 16% in March and to 32% in April, replacing some, but not all, of the lost Gulf volume.

Readily available monthly trade data covers only a minority of importing countries and excludes the largest, China, so any global LPG figure would be based on a biased sample.

India is reported instead because it reports both volumes and cargo origins, the report added.

Clean energy investments helped contain the crisis

In the first five months of the crisis alone, clean power generation added since 2020 saved importing countries an estimated USD 36 billion in avoided coal, gas and oil imports.

This includes USD 22 billion in gas imports, USD 10 billion in coal imports, and USD 5 billion in oil imports.

"In absolute terms, the largest savings were in China (USD 7.9 billion) and Japan (USD 4.9 billion), followed by Spain, France, Italy, the Netherlands, Brazil and India," the CREA report added.

Measured against what each country’s fossil fuel import bill would otherwise have been, Brazil avoided 35%, Lithuania 25%, Denmark 24% and Sweden 19% of the total national import value. Outside the EU, Brazil and Colombia saw the largest proportional savings.

According to the IEA, in 2025, global renewable power investments totalled USD 700 billion or USD 58 billion per month.

Global monthly investment in renewable power was just 5.6% higher than the USD 55.3 billion in additional monthly fossil fuel import costs caused by higher seaborne oil and gas prices following the war on Iran.